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IMPACT – HIGH
What is the change? The allocated quota for Tier 2 Restricted Certificates of Sponsorship (RCoS) has been exhausted for the month of April, the fifth consecutive month the quotas have been exhausted.
What does the change mean? Employers should anticipate that requests for Tier 2 (General) Certificates of Sponsorship with points below the minimum 46 and a salary of less than £50,000 per year have been refused and will need to be resubmitted in May.
Background: The annual quota for Tier 2 (General) visas is 20,700, allocated into monthly quotas. In 2016, the monthly distribution was changed to provide higher quotas during the high-demand months of April through September and lower quotas in other months, thereby shifting pressure on months at the end of the fiscal year (December through March). The exhaustion of quotas at the end of the fiscal year, however, has carried over into the new fiscal year. When the monthly quota is reached, applications are ranked by points obtained, with more points earned for shortage occupations, higher salaries, and certain Ph.D.-level roles.
BAL Analysis: As expected, Tier 2 quotas have been exhausted for the fifth month in a row, and BAL expects this trend to continue through May or June. Employers should plan accordingly and consider salary as the deciding factor in the approval of an RCoS request. Companies that recruit higher earners will continue to be more likely to have their applications approved.
This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.
Copyright © 2018 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
The EU and U.K. have reached a provisional deal on a 21-month transition period to follow March 29, 2019 when the U.K. formally withdraws from the EU. The transition period is meant to avoid a cliff edge where European free movement rights are cut off overnight, and should give employers and individuals greater time to plan before any new U.K. immigration rules can come into force. However, the transition agreement cannot take effect until the wider EU-U.K. Withdrawal Agreement is finalized, which still faces considerable challenges.
The Migration Advisory Committee’s (MAC) interim report, published March 27, 2018, makes clear that while U.K. business responses are being considered, employers must wait until September 2018 for the MAC’s recommendations on the future of EEA migration into the U.K. and for greater insight into the legal position post-2020.
The transition agreement clarifies that the length of the transition will be 21 months— from March 30, 2019 until December 31, 2020—and that during this period, EU citizens in the U.K. (and U.K. citizens in the EU) will continue to enjoy free movement on the same pre-Brexit terms. This means that EEA nationals and their family members (including third-country national family members) can continue to travel to and enter the U.K. without a visa, and can start working in the U.K., or indeed continue to work, without needing to obtain Tier 2 work permission. EEA nationals will likely be subject to light-touch registration procedures from Brexit Day forward, but can be reassured of their continued right to work until the end of 2020. At the end of the transition period, new U.K. immigration rules will come into force to accommodate third-country nationals and EEA nationals as part of a unified single U.K. legal system.
While BAL does not have any indication of the shape and basis for this future immigration regime, the MAC—tasked by the government in July 2017 to research the impact of EEA migration on the U.K. labor market and recommend future migration policy—has issued an interim report showing a heterogeneous response from U.K. businesses. U.K. employers have collectively voiced the business need for EEA migration to fill skills shortages and resolve recruitment issues in the U.K., indicated the negative impact that migration restrictions would have on the U.K. economy, and asserted that the current Tier 2 regime is not a suitable basis for future migration into low-, medium-, as well as high-skilled areas.
Employers must wait until September 2018 for the MAC’s recommendations on the future of EEA migration into the U.K. and for greater insight into the immigration system post-2020. However, the MAC has clarified that its measure of successful migration policy is one that leads to the highest quality of life for the resident population—and that it will carefully consider the balance of impacts rather than treating business requirements or a successful economy as the only means to that end. The MAC believes that employers should be prepared to compete for labor and invest in short- and long-term training, productivity innovations, and in wage increases to meet recruitment needs rather than rely on a migration-based business model.
The key provisions of the draft agreement on a post-Brexit transition arrangement, published March 19, are as follows:
Length of Transition The U.K. will officially leave the EU on March 29, 2019. A transition period will last 21 months—March 30, 2019 through Dec. 31, 2020—to allow businesses and individuals time to prepare for new rules. The U.K. had asked for a longer transition period, but the transition agreement adopts the EU’s proposed time period.
Citizens’ rights EEA nationals and their family members arriving in the U.K. (and U.K. citizens arriving in an EEA country) during the transition period, i.e. through 2020, will enjoy the same rights to free movement and eligibility for residency that they currently enjoy. These citizens will be eligible for permanent residency after five years of continuous residency in the host state, counting periods of legal residence or work both before and after the end of the transition period. Permanent residency may be lost through absence only if the absence exceeds five consecutive years.
Irish nationals The close political relationship between Ireland and the U.K. predates the European Union. Irish nationals have automatic settled status in the U.K. which does not derive from EU law and therefore is unaffected by Brexit or the transitional period. Irish and U.K. citizens will retain full mobility and residency privileges in their respective countries under the Common Travel Area (CTA), and Irish citizens will not be required to register under any post-Brexit U.K. immigration system. The CTA arrangement allows Irish nationals to enter the U.K., work and reside on the basis of their passport alone and without obtaining any further immigration permission.
Residency documents The U.K. may require that EEA nationals and their family members apply for a new residence status through “simple, transparent and user-friendly administrative procedures.” This means we can realistically expect some form of residence card regime to be introduced, likely based on the current non-mandatory EEA registration regime. The deadline for applying for any such status will be no less than six months after the transition period for those arriving in the U.K. before the end of the transition (or three months from the date of arrival for others, whichever is longer). Those who hold a valid permanent residence document before the end of the transition period will be able to exchange that document for a new residency document free of charge upon verifying their identity and undergoing a security check.
Ireland and Northern Ireland One of the key obstacles to the U.K. Withdrawal Agreement is the Irish border issue. Northern Ireland is a part of the United Kingdom, but shares a 500 km land border with the Republic of Ireland, which will remain a member of the European Union and subject to EU regulations. A hard border between Northern Ireland and the Republic would not necessarily affect the free movement of people as right-to-work checks are performed by the employer and not by border officials, but the movement of goods across the border and customs arrangements are problematic. The political sensitivities are particularly acute in a region that has only recently emerged from years of violent unrest under a hard-won peace accord. While the matter continues to be negotiated, under the transition agreement, the fallback position—unless another arrangement is reached—is that Northern Ireland will continue to follow EU regulations in order to avoid incongruent rules and a hard border between Northern Ireland and the Republic of Ireland.
With Brexit Day just one year away, the EU and U.K. have mostly resolved the issue of citizens’ rights, although the overall negotiations continue to create problems. Significantly, the U.K. government has agreed that EEA nationals will retain their mobility and residency rights until the end of the transition period on December 31, 2020, instead of Brexit Day. This important concession provides EEA nationals and their employers approximately two additional years of free movement to carry on “business as usual.”
Any planning for the legal regime post-2020 remains difficult, as the framework has yet to be designed and published. September 2018 should bring further guidance from the MAC on how best to project future requirements.
Companies are encouraged to work with their BAL professionals to prepare appropriate strategies for EEA employees. BAL continues to recommend that companies keep close track of their European workforce, and that EEA nationals in the U.K. apply for residency now, as they will be eligible for a streamlined process to exchange current permanent residency document for a new residency document after the end of the transition period.
Should you have any questions or require more information on how BAL can help with Brexit planning, please contact us at uk@bal.com.
The Migration Advisory Committee has published an interim report on the progress of its research into current and future EEA migration and its impact on the United Kingdom. The report summarizes written responses from 417 businesses, organizations and individuals to its call for evidence—a record number of responses to a MAC project—which will form part of the evidence base for the committee’s recommendations on the U.K.’s immigration system when any Brexit transition period ends (expected 2021). The MAC divided its report into two broad categories: (1) employer responses regarding employment of EEA workers, and (2) regional government responses on the impact of EEA migrants on population and demographic issues. The key points arising out of the employer responses on business immigration are summarized below.
Key points:
The full interim report can be viewed here.
BAL Analysis: The interim report does not make recommendations on EEA migration or a future U.K. immigration system—those will be left for the final report, which is due in September – and the MAC warns against jumping to premature conclusions. However, the report demonstrates that the MAC has received certain key messages from U.K. employers: that restrictions on EEA migration would have a negative impact on business and the U.K. economy across a broad range of sectors; that retained access to low-, medium- and high-skilled EEA labor is necessary; and that the current Tier 2 is too restrictive. In turn, the MAC has made clear that it considers that the best migration policy is that which delivers the highest quality of life for U.K. residents and that a thriving economy is only one means to this end. Employer responses and business demands will not be taken at face value and will be weighed against other impacts. In particular, the MAC has been robust in suggesting that employers (particularly those relying on lower-skilled migration) should expect to invest funds in both short- and long-term training, technology and other productivity innovations, and pay higher wages in order to attract and retain workers in a future competitive jobs market.
What is the change? The allocated quota for Tier 2 Restricted Certificates of Sponsorship (RCoS) has been exhausted for the month of March, the fourth consecutive month the quotas have been exhausted.
What does the change mean? Employers should anticipate that requests for Tier 2 (General) Certificates of Sponsorship with points below the minimum 50 and a salary of less than £55,000 per year have been refused and will need to be resubmitted in April.
Background: The annual quota for Tier 2 (General) visas is 20,700, allocated into monthly quotas. In 2016, the monthly distribution was changed to provide higher quotas during the high-demand months of April through September and lower quotas in other months, thereby shifting pressure on months at the end of the fiscal year (December through March). When the monthly quota is reached, applications are ranked by points obtained, with more points earned for shortage occupations, higher salaries, and certain Ph.D.-level roles.
BAL Analysis: BAL anticipates pressure on quotas through May or June and recommends that employers plan accordingly. While the government considers whether to make changes to its shortage occupation list to alleviate pressure on the quotas, employers should consider salary as the deciding factor in the approval of an RCoS request. Companies that recruit higher earners will continue to be more likely to have their applications approved.
IMPACT – MEDIUM
The EU and U.K. have reached a provisional deal on the transition period that will follow March 29, 2019 when the U.K. formally withdraws from the EU. The transition period is meant to give businesses time to plan before new immigration and trade rules take effect.
Key provisions:
Background: Negotiators have been wrangling over the terms of the transition for the past month, and the deal reached reflects that the EU won concessions from the U.K. on nearly all of the terms it sought.
EU negotiator Michel Barnier said the deal marked “a decisive step,” while U.K. negotiator David Davis said it would allow businesses the ability to “plan for the future with confidence.”
BAL Analysis: While the terms of the transition deal are clearer, particularly regarding citizens’ rights and the length of the transition period, the overall withdrawal deal is still uncertain until it is ratified, which is likely to be in 2019. Companies should plan for EU employees in the U.K. (and U.K. employees in the EU) to retain their free movement rights through 2020, but are encouraged to pursue residency documents when eligible. Further changes are likely to occur as both the U.K. and the EU negotiate the terms of Brexit.
What is the change? In line with its annual review of U.K. visa fees, the Home Office will increase most immigration-related government fees effective April 6, 2018.
What does the change mean? Work, study, visit, and family visas, as well as naturalization and settlement application fees will increase by 4 percent. Priority service fees will increase by 15 percent. The Home Office will not be increasing fees in relation to sponsorship in the U.K.
Key government fee changes as of April 6:
BAL Analysis: Companies and individuals should budget for the increases being implemented next month.
What is the change? The U.K. will not extend work permission requirements for Croatian nationals when the restrictions expire on June 30.
What does the change mean? On July 1, Croatian nationals will enjoy full access to the U.K. labor market in the manner of other EU nationals.
Background: Croatia joined the EU in 2013. Under transitional provisions, the U.K. opted to restrict labor access since that time. Legally, the U.K. could continue to impose restrictions for another two years. According to a statement the U.K. Immigration Minister, Caroline Noakes made to the European Commission on Monday, low unemployment rates and the strong forecasted growth of the Eurozone and Croatia do not justify extending the restrictions. Under EU rules, a country must show that “serious labor market disturbance” would occur if restrictions are removed.
Under current restrictions, Croatian nationals are required to obtain work authorization from the Home Office before taking up work in the U.K. After one year of employment, they are free to work without restrictions. Croatian partners and spouses of British nationals and other settled nationals in the U.K. are exempt from such work permission.
BAL Analysis: The removal of restrictions will benefit Croatian nationals and the companies that employ them in the U.K. with respect to the time it has taken to sponsor these individuals in the U.K. as well as the cost involved.
What is the change? The Home Office has published a statement of immigration rule changes that take effect April 6.
What does the change mean? The changes clarify that family members of U.K. citizens or residents who apply for permanent residence based on five years of residency in the U.K. must meet all eligibility criteria, including those dealing with immigration status and financial and English language requirements, at all stages of the application in order to be granted indefinite leave to remain. Other changes clarify when asylum applications can be rejected and when cultural festival performers may be paid on a visitor visa.
Background: The rules clarify the eligibility criteria for partners or parents of U.K. citizens and residents for purposes of attaining indefinite leave to remain based on five years of residency. The changes seek to confirm that all eligibility requirements must be met in order to qualify to apply for indefinite leave to remain in the U.K. through this route. The list of free cultural festivals for which foreign performers may be paid on a visitor visa has been updated for 2018 and 2019. (Normally, visitors are prohibited from conducting paid activities.) The full list is available at Appendix V of the Statement of Immigration Changes.
The rule changes also clarify that an asylum application will be inadmissible and will not be considered if an EU country has granted the individual refugee status or international protection status.
BAL Analysis: U.K. citizens and foreign residents who are applying for a partner or parent should be prepared to document that they have met all eligibility criteria for the entire five-year period. Visitors intending to perform at any of the listed free festivals may apply for a visitor visa even if they are paid for their performance.
What is the change? Employers with annual allocations of Tier 2 certificates of sponsorship are reminded that the certificates will reset on April 6 and unless their renewals are automatic (for the same number as used in the previous year), they should be manually renewed.
What does the change mean? U.K. companies anticipating the need to sponsor migrants in an unrestricted Tier 2 category in the coming year should submit their requests now. Ad hoc requests during the year are accepted, but take eight weeks or can be expedited for a fee.
Background: The Home Office will review requests in accordance with the sponsor’s usage during the current allocation period, upcoming extensions and allowances for potential business growth where the company has provided strong justification. The request may be granted in full, in part or rejected. Employers whose requests are rejected will need to make ad hoc requests during the year when they have an immediate need to sponsor an individual. Ad hoc requests take eight weeks to process, or can be expedited to five to seven business days for a government fee of £200.
BAL Analysis: U.K. sponsors should assess their staffing needs for the coming year and submit any manual requests for additional Tier 2 certificates of sponsorship before April 6.
What is the change? The allocated quota for Tier 2 restricted certificates of sponsorship (RCoS) has been exhausted for the month of February, the third consecutive month the quotas have been exhausted..
What does the change mean? Employers should anticipate that requests for Tier 2 General Certificates of Sponsorship with a salary of less than £50,000 per year have been refused and will need to be resubmitted in March.
BAL Analysis: BAL anticipate pressure on quotas through March and recommends that employers plan accordingly. The government is under pressure to reconsider roles on the shortage occupation list which are frequently sponsored, such as occupations with the National Health Service; however, in the meantime employers should consider salary as the deciding factor in the approval of an RCoS request. Companies that recruit higher earners will continue to be more likely to have their applications approved.